POKO to miss deadline; penalties could kick in

Hour Photo/Alex von Kleydorff Work ongoing at Wall St. Place on Thursday

Hour Photo/Alex von Kleydorff Work ongoing at Wall St. Place on Thursday

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Hour Photo/Alex von Kleydorff Work ongoing at Wall St. Place on Thursday

Hour Photo/Alex von Kleydorff Work ongoing at Wall St. Place on Thursday

POKO to miss deadline; penalties could kick in

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NORWALK — Developer POKO Partners LLC has missed the city's deadline for securing financing to build Phase One of Wall Street Place and a $1,000-per-day fine could be forthcoming, according to officials.

Monday, June 29, marked the deadline for the Port Chester, N.Y.-based developer, to secure construction financing under an extended deadline granted by the city.

In an email to The Hour, Corporation Counsel Mario F. Coppola said Mayor Harry W. Rilling and leaders of the Common Council and Norwalk Redevelopment Agency have participated in detailed discussions with Citibank regarding the status of the financing.

“At this time the city and agency acknowledge that a closing on this transaction is advancing,” Coppola wrote in the email Monday morning. “However, that closing will not occur by the close of business today, the date by which the Redeveloper (POKO) was to evidence to the public parties that all project financing had been closed upon. The city and agency maintain the right to exercise the Redeveloper Default provisions of the LDA without further deliberation or notice."

Inquiries by The Hour to POKO Partners Managing Member Kenneth M. Olson late last week and Monday went unanswered.

Rilling, when asked late Monday afternoon if POKO had closed on the construction financing, answered, "To my knowledge, no."

But "we’re in discussions with Citibank and POKO and everything is moving forward," Rilling said.

Between now and the next regularly scheduled Common Council meeting, Coppola wrote in his email, the city and the Redevelopment Agency will review the progress of the loan closing with Citibank officials.

“As of the next Common Council meeting on July 14, 2015, if POKO has not closed on its construction financing then the City and Agency will assess POKO with a $1,000 penalty for every day that POKO is late on obtaining its financing for Phase I,” Coppola wrote.

POKO Partners is subject to a tri-party Land Disposition Agreement (LDA) between itself, the city and Norwalk Redevelopment Agency. The agreement spells out the obligations of each party in the development of Wall Street Place.

On June 11, Olson told The Hour that construction work would begin within days.

“We’re starting construction and we’re not going to stop until the building is finished,” Olson said.

Since then, heavy construction equipment has been at the site excavating in the area of the former Isaac Street Parking Lot. That activity continued Monday.

Phase One -- a roughly $45 million undertaking -- calls for 101 housing units, 16,000 square feet of retail space, 23 surface parking spaces and an automated parking garage with more than 200 spaces available to residents and the public in the area of the Isaac Street Parking Lot.

During a special meeting June 15, members of the council's Planning Committee were scheduled to review, discuss and advance to the full council a resolution finding POKO in default of its obligations under the LDA, if construction financing were not closed on or before June 29.

Afterward, Council Majority Leader Douglas E. Hempstead, chairman of the committee, asked that a special meeting be held June 30 to allow all council members to discuss the POKO matter as well as issues related to General Growth Properties' (GGP) proposed mall for the 95/7 site.

An agenda for Tuesday evening's meeting shows only the mall matter up for discussion.

"It’s going to require an extensive evening," Hempstead said of the GGP discussion that is scheduled to be held in executive session Tuesday evening. "So I decided we’ll take (POKO) up on July 6th at our Planning Committee meeting and it will go forth to the council on our July 14th meeting."

Hempstead said all council members will be invited to attend the Planning Committee meeting July 6.

"By the 14th there will be a decision, one way or the other," Hempstead said. "And if there is a decision to extend (the deadline) with a penalty, I am certainly going to try to move forward that at some point there has to be an end to this. The bank has to either close or not, because just proposing a penalty on it still leaves us open-ended."

Councilman Richard J. Bonenfant, who also sits on the Planning Committee, offered similar sentiments.

"I voted with Doug the last time to pull the plug on them way back when," Bonenfant said. "But the council voted to give (POKO) an extension and that’s why we're here. If he doesn’t have his financing, it’s got to be more than a letter of intent. That ship has come and passed."